6 when kpmg took over as the auditor of worldcom what

Info icon This preview shows pages 2–4. Sign up to view the full content.

View Full Document Right Arrow Icon
6. When KPMG took over as the auditor of Worldcom, what communication (if any) is required with the predecessor auditor, Arthur Andersen? (This question will require research on your part.) KPMG should have asked Arthur Anderson if there were any accounting principles or auditing procedures that management did not agree with or if Arthur Anderson suspected any cases of fraud going on in Worldcom. 7. What ethical dilemmas did Ms. Cooper have to face when Gene Morse found an accounting entry for $500 million without any invoices or documentation in May 2001? At what point (according to the article) did Ms. Cooper realize that fraud was being perpetrated by management? Ms. Copper faced the problem of whether to report the $500 million to her superiors or to overlook the loss and pretend like he did not notice it. When Ms. Cooper tried to contact different people within Worldcom to try and explain why there was $500 million undocumented expenses and every person she contacted stonewalled her. 8. How did these events at Worldcom impact the public’s image of accounting? (This question will require research on your part). The public viewed accountants as the ones that helped perpetuate the fraud with management. The public become distrusting of accountants in big corporations and was not fully trust full of
Image of page 2

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
the big 4 accounting firms and their ability to oversee the correctness of corporation’s financial statements. 9. Given the potential personal costs of whistle-blowing, why should accountants “whistle- blow?” Whistle-blowers should continue to bring fraud and other illegal activities to light because it is the right thing to do. Fraudulent accounting does not only affect the employees but many investors could lose their savings based on false numbers. Big cause of fraud like Worldcom affects the whole economy and devalues other companies with its industry and makes investors fell uneasy about investing in the stock market. 10. Find an article that discusses how a specific company (other than Worldcom) was caught in a fraudulent scheme. Summarize what happened and whether the company is still in operation.
Image of page 3
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern